TK's MORNING BUZZ: Will Localization Be the Key to Independent Video Stores' Survival?

I remember back in the early 1990s, when the breadth-vs.-depth debate first came up. Bill Mechanic, then still the president of Buena Vista Home Video, said at a conference that variety is key to home video's survival (as an aside, let me note that he said it worked both ways. Without video stores, Mechanic said, "80% of what comes out of Hollywood would not be made"). Mechanic warned that if the business became focused on the hits, indies would have a tough time competing with pay-per-view.

His comments sparked a series of intra-industry debates, some public but most private, about what the future held for video retailing. Despite Mechanic's warning, the business was already becoming increasingly hit-driven, and video retailers as well as suppliers were clearly worried.

At the time, several wise voices opined that video stores should start focusing more on being a neighborhood business, and that even in a hit-driven business, indies simply couldn't compete by trying to offer the same, regardless of whether they were up against pay-per-view or the big national chains.

It was said that video stores should start carrying items of local and regional appeal, and build a following as "the neighborhood store" that could help offset any losses on the hits side.

My take is that it's high time we revisited that concept, and here are three anecdotal reasons that support my position:

1) USA Home Entertainment, as PolyGram Home Video, built the foundation of one of the most successful independent home video companies on localized programming. PolyGram took command of the sports genre, which had never really flourished under other suppliers, and crafted a well-thought-out game plan (pun intended) in which promotions and ad campaigns are targeted to home markets of popular teams featured in videos. The best evidence of this strategy's success is in the annual Super Bowl video. It's rush-released -- this year's one is due out, I believe, 16 days after the game -- and supported by a sweeping marketing blitz in the team's home town.

USA/PolyGram has moved hundreds of thousands of units of past Super Bowl titles, and then used this regional marketing approach to do respectable numbers on myriad other football, baseball and other sports releases.

2) I'm still getting notes from independent filmmakers who participated in the Filmmakers of Tomorrow series at this year's VSDA convention, telling me of sales they've made. A film made in Kentucky, which is hardly one of the world's cinematic capitals, will surely pique the interest of Kentuckians, and the same goes for films made in other small markets. Don't underestimate the power of regional appeal, WaxWorks' Noel Clayton told me after agreeing to distribute the Kentucky film and aggressively pitch it to the wholesaler's 4,000 customers, who are concentrated in that area. Smart move -- and one that, very likely, will lead to incremental dollars for retailers savvy enough to bite.

3) The most successful big bookstore chains are Barnes and Noble and Borders. Both have sections in their stores aimed at local markets, and frequently host local authors signing their works. If it works for the big guys, isn't this something the smaller fry should pursue?